What if you went to the bank to withdraw funds, and the money was gone and the account was closed? First thoughts, someone hacked my debit card.Â Second, did somebody hack into my account online? Third, did somebody steal my identity? You start to panic.Â You sit down with a banker who starts researching what happened.Â He says, ” John, the other owner on the account,Â closed theÂ account yesterday.”Â What!? How could he close the account without me? Isnt that illegal? The answer is NO.
I have helped quite a few people in this situation.Â They had no clue that the person that they put on their account had this power.
Here is another common situation that you may not know about.
You have a joint account with your brother, who isn’t the smartest person when it comes to his finances.Â You simply added him to the account in case something happens to you.Â Â Your brotherÂ got into a little trouble with the IRS, and now they are coming at him full force.Â You stop at the bank, and they tell you the balance is $0.Â That’s impossible, you just had $5,000 in there yesterday.Â The same thoughts run through your mind as in the previous example.Â You sit down with a banker who tells you there is a citation from the IRS and the funds are being held.Â What does that mean? It means your funds are no longer yours to do as you please.Â How is that possible, I don’t owe the IRS money? I havent done anything wrong!Â No you havent, but your brother who is a joint owner did.
I have helped quite a few people out with that very situation.Â It makes your life hard, and can seriously strain your family relationship.Â I have one more example that is a doozy.
This time, you are a joint owner on your brother’s account.Â You don’t care about the funds in that account, they are all your brothers.Â You were added just for security in case something happens to him.Â Sounds reasonable enough.Â You go to the bank, and they tell you that you have $0 in the bank.Â I bet you’re getting tired of being broke by now! That’s impossible, I just had funds in this account.Â After a little research, you find out that your brother over drafted his account and never brought up the balance.Â The bank transferred money from your account to cover the debt owed.Â What?! Is that legal? It sure is, and it can happen to you.
Here is a list of situations that I have seen this scenario happen:
- Tax Lien
- Child Support
- Customer being sued
I don’t mean to scare you with these stories. Well, kind of.Â I am only trying to warn you of the possibilities that can happen with joint ownership.Â I have seen my fair share of odd situations where a joint owner gets the short end because of the other party.Â I hope this prepares you for the next time someone asks if you’ll be a joint owner on their account.